Bloomberg Talks with Wei Zhou, China Creation Ventures's Founding Managing Partner, on Chinese Startups
BEIJING, April 12, 2019 /PRNewswire/ -- Today, CCV's Founding Managing Partner Wei Zhou was interviewed by Bloomberg TV, on the topic of Uber's IPO and the profitability of the sharing economy. He talks about the trend of new generation of post-95s, and foresees huge opportunities for China's entrepreneurs to make profit. Besides, he believes the new technology like AI will solve the imbalance of supply and demand, which cannot be changed by the Internet. Online education is a good example of beneficiary of these two trends. Related link:
China Creation Ventures (CCV) Founding and Managing Partner Wei Zhou was selected as one of China's 20 Best Venture Capitalists in 2018, published by Forbes China, the Chinese-language edition of Forbes. Recently, Wei was also interviewed by Forbes China. He said that the changes in the new generation's consumer behavior have brought profit opportunities to many business models. Gen Z is different from the older generation in terms of payment behavior, habits and amount. According to this insight, CCV will concentrate on opportunities related to the new generation.
About Wei Zhou
Before starting CCV, Wei was Managing Partner at KPCB China and led its digital practice group in Greater China. 30% of Wei's portfolios became unicorns in the past decade. The companies that he backed include JD.com, CreditEase, Rong360, Ximalaya FM, Yixia.com, Tan Tan Mobile Social, Asia Innovation Group, VenusTech, KJY Water, ULUCU, JD Digits, and Wanka Online.
It's reported by Forbes China and 36Kr (China's TechCrunch) that Wei led KPCB China's TMT investment team back to the leading status, and shaped its professional and selected investment style. After managing the top venture capital for ten years, Wei and his TMT investment team of many years in KPCB China founded CCV, focusing on the investment of early-stage TMT sectors. One of their portfolios, Wanka Online, went public in December 2018, within 18 months after CCV's series B Round investment. Wei was also chosen as one of China's 30 Most Influential Investors by Fortune China.
How Wei invested in Ximalaya FM
Wei had his approach of how to identify potential unicorns. He summarized into three laws and one of them is the Red Light Law. "Doing startups is like racing. The point is to leave all your competitors behind when the light turns red. The red light equals the key competitive factor, which means it stops others, but you get through," Wei said. He regarded Ximalaya FM as an example of the Red Light Law. "When I invested in Ximalaya FM's A Round, it was not Top 3 in the marketplace in 2014, but they bought copyrights much earlier than other audio platforms and speculated that content copyright competition would be breaking out." Wei recalled, "They were already ahead before the red light."
The CEO of Ximalaya FM Jianjun Yu said that Zhou was not like other investors who kept questioning business models and user data. Instead, he was impressed by the cooperation with hundreds of content innovators. Ximalaya FM tried to produce audio content in all possible ways, by supporting sound studios, buying content copyrights, establishing an AI team for personalized recommendations, collecting user information big data and developing hardware.
"Since infrastructure in the audio industry is well-developed, the content will be the most valuable property. That's why I foresaw that Ximalaya FM would eventually become an industry leader," concluded Wei. Now Ximalaya FM is China's largest online audio platform, with approximately 470 million registered users. Wei led the A Round investment of it in KPCB China and made the additional investment after starting CCV.
Wei talks about new investment opportunities
From Wei's perspective, Ximalaya FM is also a beneficiary of the changes in the new generation's paying behavior. The 123 Festival is a 3-day promotion equal to Alibaba's Double 11. During the festival, Ximalaya FM's members get discounts when buying audio content. It's claimed that the revenue of 123 Festival reached 435 million RMB in 2018. Before that, it was respectively 196 million RMB in 2017 and 49 million RMB in 2016. Among which, over 70% of paying users are Gen Zs.
Besides, the innovation of technology in China is another investment opportunity. For instance, AI+ online education holds a massively big growing market. Wei invested in Dingdong Class, which provides "pseudo-live broadcasting classes" at much lower prices compared to traditional live broadcasting ones. It created a similar experience by using pre-recorded video clips and AI technology. The innovation breaks through the limitation of teacher resources and makes it possible to create a scalable learning opportunity.
"China has massive data and abundant business scenarios for AI startups to launch the technology quickly. That will be a competitive advantage, and education is just one good example," Wei said.
*Data from public reports.
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SOURCE China Creation Ventures
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